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'via Blog this'"The S.E.C. in recent years has failed in almost every possible way a regulator can fail to police powerful criminals. Failure #1 was that it repeatedly fell down on the job even when alerted to problems at big companies well ahead of time by insiders. Six months before Lehman Brothers collapsed, setting off a chain reaction of losses that crippled the world economy, one of Lehman’s attorneys, Oliver Budde, contacted the S.E.C. to warn them that the firm had understated CEO Dick Fuld's income by more than $200 million; the agencyblew him off. There were similar brush-offs of insiders with compelling information in cases involving Moody’s, Chase, and both of the major Ponzi scheme scandals, i.e. theBernie Madoff and Allen Stanford cases.
The S.E.C.’s attitude toward whistleblowers at powerhouse companies has not just been aloof or indifferent, it’s been downright hostile at times. Whistleblowers commonly report being treated as though they're the criminal. The most notorious example probably involved Peter Sivere, a compliance officer at Chase who years ago went to the S.E.C. to complain that Chase was withholding an incriminating email from the agency, which was investigating an illegal trading practice. When Sivere contacted the S.E.C. with the documents, he asked if he would be eligible for an award; they told him no, and he gave them the documents anyway. Subsequently, Sivere was fired by Chase because, in the words of Chase’s attorneys, Sivere had "sought payment from the SEC to provide documents and information to them.”
Sivere had to scratch his head and wonder how his bosses knew about the award request , until it dawned on him: the S.E.C. had ratted him out to Chase! It subsequently came out that the S.E.C. official who’d narked on Sivere was George Demos, who more recently was seen running for Congress in New York."
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